Despite SEBI norms, some PSUs like NMDC and Power Grid still do not have a female independent director
By Riya R Alex | August 30, 2023
Twelve out of the top 60 Public Sector Undertakings (PSU) by market capitalisation, including IRCTC and Powergrid Corp., are violating Indian market regulator norms by not having a single female independent director (ID) on their Board.
The Securities and Exchange Board of India’s (SEBI) Listing Obligations and Disclosure Requirements prescribe that public and private companies shall have at least one female independent director on the Board of Directors. PSUs like Powergrid Corporation India Ltd., NMDC Steel Ltd., IRCTC & Rail Vikas Nigam Ltd., among others, have not complied with this rule.
Emails and calls to the SEBI spokesperson, PSUs, and Ministry of Corporate Affairs did not elicit any response.
Some PSUs in this list had female Independent Directors, but they were not reappointed after their terms expired. Pushpa Trivedi was Hindustan Organics Ltd.’s last female independent director. The company, after Trivedi’s stint ended in 2019, did not fill her position with another female Independent Director. Similarly, Seema Gupta was Powergrid Corp.’s last female ID whose term ended in 2019.
Central PSUs and their concerned ministries nominate a search committee to appoint non-official directors to the board of directors, according to the Ministry of Corporate Affairs. The government has laid down the criteria in terms of age, educational qualifications, and years of experience for non-official directors.
“The challenge that PSU Boards face is the lethargy and apathy of the governing ministries,” said Shriram Subramaniam, Analyst, InGovern Research Services. “The Board seeks guidance from the respective ministry that leads to delays in all fronts.”
The above reason as to why PSUs don’t care about SEBI mandate on all corporate governance fronts.
PSU’s don’t have a female independent director because of long bureaucratic processes and delayed government appointments, said Usha Thorat, former deputy governor of the Reserve Bank of India. Thorat was an independent director on the board of ONGC in 2011 for eight months.